I guess the problem is an archive. Jan741, "7z" file is an archive file, which you should unpack first with free 7z archiver. After unpacking, you'll have a lot of document pages and file called "kolibri.img". It's floppy image, which you can write on floppy
with RawWrite/WinImage/dd/SomethingElseLikeThis. Also, you can install "kolibri.img" on your SD/USB stick or Hard Disk. Read documentation for further info. If something will be unclear, ask here. Good luck
The file M32-086.iso is 1.40 MB so can't be write on floopy. Should be writed?
I don't remeber when last time used this hard drive and disk but question is:
1. We should just copy M32-086.iso on disk and run in boot normaly like old dos disks before format w95?
2. Or need more actions to prepare kOS?